Capcom On Digital Distribution, PC Ubiquity

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New PCGA-member Capcom think digital distribution is the future, and their support of PC gaming is tied up with that belief. One of the people behind that support is Christian Svensson, vice president of strategic planning at Capcom. Svensson talked to us about the importance of the PC for this traditionally console-focused publisher, the problems of developing for PC, and whether digital distribution is more important for the PC than retail.

RPS: Hi Christian, can we start by talking about Capcom’s increased interest in the PC, and perhaps a little about the attitude of your company towards the PC as a platform?

Svensson: Sure, well, I think it’s fair to say that for PC audiences, when you think of the PC platform, then Capcom probably isn’t a publisher that comes to mind right away. But there are two initiatives going on, one in Japan, and one in the West.

People might remember Devil May Cry 3, Resident Evil 4, and Onimusha – these were projects that were outsourced, and run by our licensing team, rather than internal R&D. They were thrown over the wall to a developer, and the ports were quick and dirty, and even internally were not viewed favourably. As part of the licensing deal Ubisoft had the rights to distribute. Shortly thereafter the US side of our business decided to bring that back into the consumer software side and grow it. At the same time there were two things happening in Japan: number one was the development of the MT framework, the technology which would allow us to port over work we’d done on PS3 and 360 to the PC. The second thing was a broad online initiative towards Japan, Korea, and China, headed up out of the Tokyo office. The first title that has shipped is Monster Hunter Frontier, which is now one of the most successful MMOs in Japan.

So that’s how we got to where we are with bringing titles to internal development on PC. Lost Planet was the first game to ship with DX10, and it had some of the code that became Steamworks in it. They had to peel out some of the code that we worked on for that game, to make what you see today on that platform. So we were forward thinking with all that kind of functionality. Since then we’ve released Devil May Cry 4 and Lost Planet Colonies. And MotoGP ’08, NeoPets, Flock, Dark Void have all come, or are coming out, from the West. We also have Streetfighter 4 coming out from Japan on the near horizon, and Dead Rising 2 a bit further out. There’s more too, but we’ve not announced that yet.

RPS: But what actually sparked that change? When large publishers are grumbling about PC and pushing it away, why make that transition so actively?

Svensson: Taking a very global view. We have brands that are very appealing, but the platform of choice in many countries is not a current-gen console. I’ll point to Russia, to Brazil, to emerging markets in the Middle East. India is an emerging market, even if it is a few years away from doing the kinds of things that we need. The PC is global, and it’s ubiquitous. And quite frankly, the more people who shy away from that platform, the bigger the opportunity. It’s not easy, however. The PC has a lot of moving parts, there’s a lot more testing to be done, there’s a lot of considerations about how to even get to market. You need broad understanding. We know it’ll take a few years of development and investment before we’re where we want to be.

RPS: Is digital distribution more important to the PC than retail?

Svensson: For me? Absolutely. No question in my mind. Digital distribution on PC ties directly into our strategy. Capcom is trying to lead in digital distribution, and I would go as far as to say that in the console space we are already the leading software publisher. We’ve had the highest revenue-generating Xbox Live title, we’ve had the highest revenue-generating Wii title, we’re definitely in the top three or four on the PlayStation network. To that end, on the PC side, I’ve spent the past year building up a digital distribution channel that has about twenty different partners. We’re ready on the console side, and we were the first Japanese publisher to do anything on Steam.

RPS: And would you say that increased digital sales presence is more important than increased PC presence at retail?

Svensson: In the current market, I would. We will probably do as much digital selling as retail in the current climate.

Svensson: Look at the mission of the PCGA. It’s to improve the PC gaming ecosystem. How do we go about doing that? One of the problems, to be candid, is that retail is falling away. What are the reasons for that? Partly it’s that return rates are very high. Returns of a PC title are usually double that of a console title – why? Because it’s not a great consumer experience because there’s variation in minimum spec, and it requires a lot of consumer knowledge to figure out exactly what is in their box, and what that will run. If we can improve that, if we can improve issues with DRM and create an anti-piracy policy that is friendly to consumers, that will remove barriers to sales, and improve the ecosystem. Being completely mercenary: all this will improve our bottom line. The more successful we are on a platform, the bigger the risks we can take, and the better content we can produce there. Our membership of the PCGA is about improving the market: we want to improve the experience for consumers. More selfishly, if there are going to be “best practices” suggested that become standards, we want to make sure our interests are looked out for.

RPS: Piracy is the other big issue for the PCGA, isn’t it? I see they’re working up a report on that.

Svensson: It is a big issue on PC, and it’s probably not going to go away. The PCGA is putting some of the best minds in the industry to work on that, and I hope it’ll be able to make some useful recommendations. We would like to improve the situation, because it would improve our bottom line. But we do really need to examine the situation carefully, and perhaps even look at whether some elements of piracy can be harnessed for good. As a distribution network it is useful, and perhaps that can help us distributed software trials and so on. There are aspects of piracy that, if they can be turned around, can become positive.

RPS: I guess we’ll have to see just what the PCGA report recommends in that regard. Christian, thanks for talking to us.

I’m inclined to be impressed by the apparent candid nature of his responses, though I have a niggling suspicion that the kind of person who reaches a position such as his in a sizeable publisher such as Capcom, is the kind of person who can appear falsely candid to ingratiate others. I may be slandering the man unfairly. Also, if he is being duplicitous for the sake of ingratiating hardcore members of a target market, then I respect how good he is at it.

Nonetheless, I fear for Capcom’s efforts on the PC. I find myself wondering whether the market that Capcom provides games for, is the market which, noticing that the games they sought were not on the PC, left to greener, console pastures. Obviously this doesn’t account for the tendancy of people to be interested in more than just a narrow spectrum of gaming (The PC gamer who would quite like to try some of their games, but wouldn’t get a console for them), but I still suspect that games like Devil May Cry, Street Fighter IV etc. will find limited traction with the modern PC crowd.

Then again, I may be assuming my own tastes are that of others. I encourage Capcom’s apparent embracing of the PC as a gaming platform, but can’t help noticing that I’m just not interested in any of their games.

I should be more specific and add to the above that my point is more focused torwards the mainstream PC gaming crowd (If such a thing exists any more outside of The Sims and WoW). Hardcore gamers are the kind who will buy into every platform and pick which to play a multi-platform game on in accordance with their preferences, or alternatively will dig their tendrils deep into one platform, refusing to move to another for games they would otherwise purchase.

Mainstream gamers however, in an entirely ineducated guess, tend to pick one-two platforms, often based on the platform of a few games they have an interest in. The Halo gamer who picks the 360 for more Halo, the Final Fantasy player who picks the PS2 for more Final Fantasy, the RTS gamer who upgrades his PC to play more RTS.

With that in mind, would the mainstream gamer not move to a console of choice, if he was the kind who was interested in Capcom’s games? They’re certainly mainstream games, well-known and regarded enough to justify platform movement, or at least encourage it. Is the remaining mainstream PC audience there to provide profitable returns on focused effort on the PC as a platform, for the kind of genre that has been so sparsely supported for years?

“With that in mind, would the mainstream gamer not move to a console of choice, if he was the kind who was interested in Capcom’s games?”

1) Not every title is console-selling in its impact, particularly in an age where cross-publication is common.

2) The console market is more divided than it’s been in a long time. I can’t think of a time in the past we’ve had three viable consoles (four counting the PS/2, which remains surprisingly strong). In the past, you really only ever had two at a time– and it was usually one and then a runner up as far as market-share went. SNES > Genesis. PS2 > XBox.

Yeah the initiative in Japan is to supply only one or two old games, and charge $49.99 for them. Then regionally restrict everything else so you can’t buy it via DD, such as the GTA series that they own the Japanese distribution rights for.

So basically, here, we are left with the impression that Capcom simply don’t want to support the PC in Japan. Man, I really wish Japanese developers/publishers would stop treating the PC like it’s got a contagious disease that they don’t want to be anywhere near.

DMC 4 not being on steam essentially boils down to the Japanese studio who made the game not really understanding the appeal of DD.
And Bionic Commando Rearmed isn’t on there because they wanted a bigger than normal cut of the profits for that type of game.

Hmmm, Steam sales are probably a great way of doing market research. If you’re Capcom, why not sell one of your popular console titles for $5 on the PC just to see how many people will buy it. I’m sure Steam also keeps track of how many hours are spent playing Lost Planet…and how many people actually ended up installing it.

very promising, i like, ohh and when’s RE5 coming out on PC? it was supposed to be simultaneous and now like street fighter it seems to have drifted off to June, this isn’t amazing practice considering we all know the PC is the lead platform for your games.

Good man. Forward thinking, continuing to iterate while innovating in distribution methods seems successful, as long as it doesn’t lead too deeply to re-tread land. He could be a corporate shill, but most everything said in the past was accurate and speaks of veracity, so I think he’s sharing his company’s vision.

Good to see that more and more publishers, distributors and developers are understanding the basic fact that replicating data and distributing it over the internet costs pennies. You can lower your price point and more than make up for the difference in volume of sales. Creating infinite copies does not reduce value as one is not physically creating consumable goods, only licensed arrangements of 0s and 1s. Nor is scarcity an issue with easily, perfectly replicable code delivered via a connection both parties share and requires less effort by the consumer to procure their item of choice. I will repeat these basic fact sover and over until it sinks in to our collective consciousness. Everything has changed, and we can’t change it back. All we can do it do the best we can with the tools we have available. Double plus good if the tools allow us to replicate without error and cheaper and distribute world wide cheaper and easier. Win Win.

Now if Valve and Capcom can kiss and make up after Capcom’s confusing pricing of a beloved 2-D remake for the PC area (and, subsequently, Capcom chooses to price their products competitively on competing platforms) maybe they can help move together in furthering enjoyment and availability of titles on the PC.

“1) Not every title is console-selling in its impact, particularly in an age where cross-publication is common.

2) The console market is more divided than it’s been in a long time. I can’t think of a time in the past we’ve had three viable consoles (four counting the PS/2, which remains surprisingly strong). In the past, you really only ever had two at a time– and it was usually one and then a runner up as far as market-share went. SNES > Genesis. PS2 > XBox.”

1) Entirely agreed, and certainly not what I’m implying. I’m seeing it in terms of a trend, as it’s not a case of a single game moving to consoles, but instead an entire genre. How many beat-em-ups have there been on the PC in the last few years, for example? (Perhaps many, I may be basking in my own ignorance)

Now one would assume that anyone with a reasonably amount of interest in that genre, would then at least give serious consideration to purchasing a console. Not necessarily at the expense of their PC gaming, but they would open that avenue, so they could experience the games released in that particular genre.

Now, after a period of years, a beat-em-up returns to the PC. Those people (still very possibly PC gamers) have already purchased a console, and may well buy the game on that platform. Hypothetically, all you have left as a concrete audience for your beat-em-up on the PC are the people who weren’t particuarly interested in beat-em-ups, or were platform fanatics and would not consider gaming on anything other than a PC (A fairly hardcore standpoint, which is rather niche).

2) I agree, though I don’t see the relevance. Gamers own both PCs and consoles. Mainstream gamers own PCs and consoles, Far more than any Wii60/PSWii/PS360 business, is the likelihood of a gaming household having both a PC and a console (Admittedly not necessarily a PC capable of high-end gaming).

All you need is a degree of genre association with a particular platform’s play experience, for the PC audience for that same genre. Vice versa as well of course, but I think it’s fairly clear which way that would swing with regard to beat em ups.

“All you need is a degree of genre association with a particular platform’s play experience, for the PC audience for that same genre to become diluted, perhaps to the point that it can no longer profitably sustain exploratory attempts to ‘bring that genre back’. Vice versa as well of course, but I think it’s fairly clear which way that would swing with regard to beat em ups.”

Here’s hoping for RE5 on Steam. I like how Capcom seems to want to mingle with the PC crowd now. And would very much like them to keep it up. There’s some games of theirs I’d like to play but I don’t want to have to buy a this-gen console to do it.

Given the healthy online community that plays fighting games on PC using MAME I have no doubt Street Fighter IV will do well on it.

And it’s refreshing to see publisher recognize that the PC still is the platform of choice in several parts of the world. Currently the only company that takes the Brazilian PC market seriously is EA – they always release games here on the same day or close to the US release date.

Nice to see a developer not shying away from talking about the problem of piracy for fear of angering a bunch of PC elitists who for some reason get up in arms when piracy is mentioned.

The return rate on PC games stat was interesting as well, as I thought that would be lower since many retailers don’t take returns on PC games. I guess the barrier of entry is finally catching up to the market which is now a lot more casual than it was 10 years ago. Moms and Grandparents buying Sims or Peggle don’t want to have to deal with driver installations and troubleshooting I suppose.

It’s nice that Capcom is releasing games for the PC, but considering the fact that they come out usually 6 months later after everyone who is already interested in the game has already played it, does it really matter?

You know, the thing I was most impressed with in this interview is that he used the term “current-gen” instead of “next-gen”. I’d go as far as say the rest of it is not all hypespeak, either, there’s meaning and substance to his words.

Not only that, but at a time when developers are constantly grumbling about second hand sales “destroying” the industry and their beloved products, Digital Distribution is a means to effectively shut out the entire second hand market.

I’m calling it now, DD isn’t just going to become prevalent on the PC, in future more and more devs are going to be heavily focussed on DD with their console games as well.

At the moment, retail is king, and will be for a long time yet (bandwidth and internet services just aren’t there yet in a lot of major markets). But whilst the majority of per unit sales are still going to be from retail for the time being, I can potentially see it happening within the next ten years that most major devs will be making more money off of their DD sales than retail.

With that comes a shift in which market you cater more, so I expect that games content will become a lot more fluid over time, and there’ll be more emphasis on developing the product after it’s shipped, as opposed to the six week retail window that’s currently the emphasis of major releases.

Now comes the question of whether they’re going to still stick with those frickin’ install limits. *grumble*

I’m ok with steam as the purchase place for SF4, but I’m really hoping that they’ll go GGPO for the multiplayer or at least license the GGPO code like they did for the HD remix of Super Turbo. Vanilla Steam would probably be too laggy to be enjoyable.